The foreign assets of the UAE Central Bank swelled by nearly Dh35 billion over the past year and most of the increase was in its investments in foreign securities, its balance sheet has shown.
From around Dh120.6 billion at the end of January 2010, the central bank’s total foreign assets surged by nearly 29 per cent to Dh155.4 billion at the end of January 2011, showed the figures released this week.
The assets had gained around 12 billion in the previous year after recorded their biggest annual decline of nearly Dh169 billion in 2008.
Analysts said the massive fall through 2008 was mostly after the eruption of the global fiscal crisis in mid September as the central bank was forced to unlock funds for local banks jolted by liquidity shortages.
They said the central bank’s assets were rebounding due to a recovery in the domestic liquidity situation and the fact that most UAE banks are keeping deposits with the more secure central bank than lending to the private sector.
The Central Bank’s foreign assets hit an all time high of around Dh285 billion at the end of 2007 before sinking to Dh116 billion at the end of 2008. They bounced back to around Dh128 billion at the end of 2009 and continued their growth to reach Dh155.4 billion at the end of January.
The bulk of the increase over the past year was in held to maturity foreign securities, which are held at amortized cost and are not affected by market swings.
From a negligible Dh0.04 billion at the end of January 2010, they skyrocketed to nearly Dh80.5 billion at the end of January 2011.
By contrast, the Central Bank’s deposits abroad slumped from about Dh82.2 billion to Dh37.4 billion in the same period, the report showed.
Held to maturity Dubai government bonds remained at Dh36.7 billion at the end of January whole other assets stood at only Dh0.69 billion.
In a statement before the end of 2010, the Central Bank expected its income to rebound sharply during 2010-2011 after a fall of more than 14 per cent in 2009.
Its figures showed the profits could surge from around Dh3.18 billion in 2009 to nearly Dh3.67 billion in 2010 and Dh3.7 billion in 2011.
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